Filling out your own self assessment tax return can be relatively straight forward. Here’s some tax advice for Avon Reps who are filling out their own self assessment tax return.
When is the Self Assessment Deadline
Self Employed Avon Reps need to submit their self assessment tax returns by 31 January each year. The penalties for missing this deadline start at £100.
What Do You Need to Submit to HMRC
By the 31 January of each year self employed Avon Reps need to:
- submit a self assessment tax return form
- pay any tax and national insurance
- make a payment on account contribution towards the next years tax bill, depending on earnings.
One tax return form covers a tax year. A tax year runs from 6 April to 5 April. So a tax return for 2017/2018 covers earnings during 6 April 2017 to 5 April 2018 and needs to be filed by 31 January 2019.
What You Need to Get Started
To get started with filling your tax return you will need any paperwork which reflects your earnings including:
- Personal Information
- Your Government Gateway Login and Password
- National Insurance Number
- Partners Information if you want to claim Marriage Allowance
How to Work Out Your Earnings as an Avon Rep
Avon Reps pay tax on the profit they make in their business. Profit is the amount of money an Avon Rep makes after deducting all the costs from sales.
You gross Avon income is the money you collect from your customers, leadership bonus’ and website sales.
Your business expenses will reduce your profit and how much tax you need to pay so it is important to include them all on your tax return.
Generally speaking most things you pay for as part of your Avon business will be allowable, here are some examples:
- Avon purchases
- Computer & Printer
- Avon Fees
- Telephone and internet
- Travel and Mileage
- Home office costs
- Accounting fees
- Bank charges if you keep a separate business bank account
All expenses must be supported by a receipt and kept for 6 years, so make sure you file them away.
It is a common to have something, like a laptop, that you use for business and personal reasons. In these case you are only allowed to claim for the portion of the item being used for your business.
Say you use your laptop 60% of the time for your business and the other 40% for personal things like internet shopping, facebook etc. You would only be able to claim for 60% of the cost of the laptop against your taxes.
If you are in the early stages of your Avon business you may make a loss. This is entirely normal for businesses who need to invest in things to get started. You should record your tax loss on your tax return as there are special rules on how you use these which are beneficial at a later date.
How To Submit Your Self Assessment Tax Return
Avon Reps must submit their self assessment tax returns online, except for in really exceptional circumstances. You need to log into your Government Gateway Account to complete your self assessment tax return online. Once logged in you can choose the option to “Complete Your Self Assessment Return”.
Complete the Right Sections
You need to complete the first part of the tax return form with your personal details. This includes a series of questions which help ‘Tailor Your Return’. By doing this the right sections will be provided for you to fill in. For Avon Reps you’ll need to make sure you fill out the Self Employment section to declare your business income.
If you have a full time job you’ll need to enter your earnings and any tax deducted by your employer in the “Employment Section”.
How Much Tax does a Self Employed Avon Rep Pay
When you file your self assessment tax return online your tax and national insurance will be calculated automatically by HMRC.
A self employed Avon Rep needs to pay Income Tax as well as Class 2 and Class 4 National Insurance. The amount to pay is based on business profits and there is a tax free amount for each that an individual can make before tax kicks in.
Payments On Account
When you are self employed you may need to make a “Payment on Account”. This is an additional 50% payment of your current tax bill as a contribution towards you next tax bill.
You’ll need to make a payment on account if:
- Your tax bill is over £1,000
- You pay less than 80% of the tax they owe through the payroll system
Anita is a Chartered Accountant with over a decade of experience taking self employed business owners from financially confused to business savvy.
She is the creator of the ‘Go Self Employed’ website, which her corner on the internet where she makes self employment less terrifying.